Former President Donald J. Trump has been found guilty of repeatedly committing fraud by misrepresenting the worth of his assets, according to a surprising decision made by Justice Arthur F. Engoron on Tuesday in a New York courtroom.
The ruling is a significant win for Attorney General Letitia James in her lawsuit against Trump, effectively bypassing the need for a trial to establish Trump’s fraudulent practices in securing loans and insurance deals.
The lawsuit alleges that Trump overstated the value of his properties by a staggering $2.2 billion, with Attorney General James seeking a penalty of around $250 million when the trial begins shortly.
Justice Engoron’s ruling directly addressed the annual financial statements submitted by Trump to financial institutions, stating that they “clearly contain fraudulent valuations that defendants used in business.”
Attorney General James welcomed the ruling, saying, “We look forward to presenting the rest of our case at trial.”
However, Christopher M. Kise, Trump’s lawyer, indicated that they would appeal the decision, denouncing it as “outrageous” and “completely disconnected from the facts and governing law.”
He argued that the judge had disregarded an earlier appeals court ruling and fundamental legal, accounting, and business principles.
Trump himself responded by calling Justice Engoron a “deranged” Democrat.
While the trial will determine the exact penalty, Justice Engoron’s decision carries significant consequences for Trump.
It grants one of Attorney General James’s significant demands—the cancellation of business certificates allowing Trump’s New York properties to operate.
This move could have far-reaching implications for the Trump family business, potentially leading to Trump losing control of iconic properties like 40 Wall Street in Lower Manhattan and a family estate in Westchester County, among others.
Although the ruling does not dissolve Trump’s extensive corporate empire, it could substantially impact the company’s New York operations, jeopardizing hundreds of employees if not overturned by an appeals court.
Trump’s Legal Setback: Implications for His Corporate Empire and Brand
Kise criticized the decision for seeking to “nationalize one of the most successful corporate empires in the United States and seize control of private property.”
The ruling would also result in the unwinding of the Trump Organization L.L.C., a minor entity primarily associated with Trump’s brand.
Notably, this legal battle has overshadowed other charges against Trump, including four criminal indictments unrelated to Attorney General James’s accusations.
Justice Engoron’s decision, if upheld, marks the first significant punishment to emerge from a government investigation into Trump.
The ruling narrows the issues to be addressed at trial, confirming the validity of the core of Attorney General James’s case.
It dealt a significant setback to Trump, whose legal team had attempted to dismiss numerous claims against him.
In his order, Justice Engoron sharply criticized Trump’s defenses, accusing the former president and other defendants, including his two adult sons and his company, of ignoring reality when it suited their business interests.
He stated that in the defendants’ world, “restrictions can evaporate into thin air,” describing it as a “fantasy world, not the real world.”
Furthermore, the judge imposed sanctions on Trump’s lawyers for reintroducing previously rejected arguments, ordering each to pay $7,500 and labeling the repetition ‘indefensible.’
Even if Trump fails to overturn the ruling on appeal, he still has avenues to delay or challenge the trial’s outcome.
Trump has filed a lawsuit against Justice Engoron, with an appeals court expected to rule on that matter soon. If the appeals court rules against him, Trump will face the remainder of the case at trial.
This legal setback is significant for Trump, a self-proclaimed champion of his real estate holdings and brand.
The possibility of legal consequences stemming from his exaggerations has long intrigued prosecutors.
While previous district attorneys considered charges related to his property valuations, his indictment in connection with a hush money payment currently looms over his post-presidential life.
Source: The New York Times